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Embattled electronics giant Best Buy said net income fell more than 90 per cent this quarter, as same-store sales declined more than three per cent from the year ago period.
The company said it earned adjusted operating income of $124 million during the three months ended August 4, or $0.20 a share. Revenues declined three per cent during the period to $10.55 billion.
However, when adding one-time items, including the company’s restructuring costs, net income fell to $12 million, or $0.04 a share.
Analysts polled by Bloomberg forecast Best Buy will post earnings of $0.31 a share on revenues of $10.6 billion.
The Minneapolis based firm also suspended its guidance and said it would stop buying back shares as it re-evaluates its position.
Consumers continued to use Best Buy locations as show rooms, with both international and domestic stores tallying lower sales across major product segments including computing.
“The Domestic segment comparable store sales decline of 1.6 per cent was driven by declines in gaming within the Entertainment revenue category, digital imaging and televisions within the Consumer Electronics revenue category and notebooks within the Computing and Mobile Phones revenue category,” Best Buy said in a statement.
Shares are more than 9 per cent lower in pre-market trade, at $16.47.
Earlier this month, Best Buy founder Richard Schulze offered to buy out the electronics company, for as much as $8.84 billion. Schulze sent a letter to the company’s board of directors this morning offering $24 to $26 a share, a 30 per cent premium to trade.
Schulze declined an offer the board made to access its books this week, saying the terms were onerous. Schulze is required by Minnesota law to gain the company’s approval before signing certain deals with private equity funds.
Today’s report also follows yesterday’s announcement that Best Buy would appoint Hubert Joly its new CEO. Joly, a former hospitality executive, will replace interim-Chief Mike Mikan in September. Joly is not expected to be on the conference call today.
Brian Sozzi of NBG Productions has had a sell rating on Best Buy since February, before much of the recent leadership troubles.
“After this type of news bomb, Best Buy reminds me of a decaying bridge; it was lovely and served an important purpose when it opened, but it’s decaying state through the years has caused a new bridge to be built nearby that is stealing all the car and truck traffic,” Sozzi says.
Embattled electronics giant Best Buy is set to report quarterly results for its second quarter in a few minutes, with expectations for the company to see revenues fall some three per cent year-on-year.
Analysts polled by Bloomberg forecast Best Buy will post earnings of $0.31 a share on revenues of $10.6 billion — both representing declines from the year ago and prior quarter.
The company has scheduled its announcement for 8:00 a.m. ET.
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